Shares of drug major Cipla posted biggest intraday percentage gain in over 3 months on Q4 profit. The stock jumped nearly 8 per cent as the company has reported a consolidated net profit of Rs 153.25 crore for the quarter ended March 31, 2018.
The stock gained 7.27 per cent to Rs 562.50 on the BSE. On the NSE, the shares soared 7.80 per cent to Rs 564.90. In terms of equity volume, 2.92 lakh shares of the company were traded on the BSE and over 52 lakh shares changed hands on the NSE in the morning trade.
Cipla had on Tuesday reported a consolidated net profit of Rs 153.25 crore for the quarter ended March 31, 2018, on account of robust sales in key markets and reduction in expenses.
The company had posted a net loss of Rs 62.79 crore during January-March, 2016-17. Total income from operations stood at Rs 3,697.97 crore against Rs 3,582 crore in the same period a year ago, Cipla had said in a BSE filing.
HSBC says Cipla remains its preferred name amid ongoing sector headwinds; it has maintained “buy” rating, and lowered the target price to Rs 620 from Rs 700.
“We expect margin expansion story to continue on operating leverage driven by US sales ramp-up, better profitability in markets like Europe, and ongoing cost-control initiatives. We factor in about 245 bps improvement in core EBITDA margins over FY 18-20,’’ says HSBC.
Deutsche Bank believes increase in R&D costs, and limited scope for cost savings will cap the improvement in EBITDA margin trajectory. The brokerage has factored in about 300 bps improvement in EBITDA margins over the next 2 years, driven by traction in US business. It has cut the target price to Rs 511 from Rs 595, and retained “hold” rating.
Citi remains positive on Cipla's ability to outperform most peers on earnings traction, given its relatively lower exposure to the United States and improving quality of launches in market. It has cut the target price to Rs 650 from Rs 680, and has kept the “buy” rating.
Macquarie analysts say, with improving sales and margins outlook, Cipla is best placed among large-cap pharma stocks; it has cut the target price to Rs 636 from Rs 670, and has maintained “outperform” rating.
About 24 of 39 brokerages have rated the stock “buy” or higher, 12 “hold” and 3 “sell” or lower; their median target price is Rs 645, according to Thomson Reuters data.